According to traditional Freudian psychoanalysis, repression is the Ego’s denial of the drives of the Id, which then remain latent in the unconscious. Sublimation, on the other hand, is the product of repression; it is what the Ego accomplishes in the act of repression – namely, culture. Here is Žižek’s description, from Metastases of Enjoyment:

In an alienated [i.e., modern] society, the domain of ‘culture’ is founded upon the violent exclusion (‘repression’) of man’s libidinal kernel which then assumes the form of a quasi-‘nature’: ‘second nature’ [i.e., the unconscious] is the petrified evidence of the price paid for ‘cultural progress’, the barbarity [i.e., exclusion/repression] inherent to ‘culture’ itself (11).

But because the key characteristic of both repression and sublimation is the Ego’s diverting its attention away from the immediate satisfaction of a drive, it is impossible to distinguish “in a theoretically relevant way between the repression of a drive and its sublimation” (11); the distinction is always arbitrary.

Žižek explains the consequences of this fact for psychoanalytic practice and hence for ideological critique:

[E]very sublimation (every psychic act that does not aim at the immediate satisfaction of a drive) is necessarily affected by the stigma of pathological, or at least pathogenic, repression. There is thus a radical and constitutive indecision which pertains to the fundamental intention of psychoanalytic theory and practice: it is split between the ‘liberating’ gesture of setting free repressed libidinal potential and the ‘resigned conservatism’ of accepting repression as the necessary price of the progress of civilization (12).

But because Freud thought that this ‘standard’ form of the Ego’s splitting by the Id and Superego – where the Superego (social pressure) condemns the Id (drives) – was an anthropological constant, he could not predict, says Žižek, the

paradoxical condition actualized in our century: that of the ‘repressive desublimation’, characteristic of ‘post-liberal’ societies in which ‘the triumphant archaic urges, the victory of the Id over the Ego, live in harmony with the triumph of the society over the individual’* (Metastases, 16; Žižek citing Adorno, “Zum Verhältnis,” p. 133).

That is, Žižek’s wager is that we live in a society in which Id and Superego coincide, breaking the traditional model of psychoanalytic theory:

In post-liberal societies […] the agency of social repression no longer acts in the guise of an internalized Law or Prohibition that requires renunciation and self-control; instead, it assumes the form of a hypnotic agency that imposes the attitude of ‘yielding to temptation’ – that is to say, its injunction amounts to a command: ‘Enjoy yourself!’. Such an idiotic enjoyment is dictated by the social environment which includes the Anglo-Saxon psychoanalyst whose main goal is to render the patient capable of ‘normal’, ‘healthy’ pleasures.

Society requires us to fall asleep, into a hypnotic trance, usually under the guise of just the opposite command: ‘The Nazi battle cry of “Germany awake,” hides its very opposite.’ Adorno interprets the formation of the ‘masses’ in the same sense of this ‘regression’ of the Ego towards automatic and compulsive behavior (Metastases, 17; Žižek citing Adorno, “Freudian Theory and the Pattern of Fascist Propaganda,” in The Culture Industry: Selected Essays on Mass Culture, London: Routledge, 1991, p. 132).

The superego (culture, society) represses non-Id enjoyment; sublimation becomes repression: one is told that one must enjoy to one’s full capacity. Indeed, frequently there is the explicit injunction to directly express the (would-be) Id, to fully actualize one’s wildest fantasies and most urgent impulses, since the alternative would be a ‘repressive’ existence unacceptable to society.

I’ll end with one of Žižek’s anecdotes that illustrates the way this repression of non-enjoyment works. The following is from First as Tragedy, Then as Farce:

On the information sheet in a New York hotel, I recently read: ‘Dear guest! To guarantee that you will fully enjoy your stay with us, this hotel is totally smoke-free. For any infringement of this regulation, you will be charged $200.’ The beauty of this formulation, taken literally, is that you are to be punished for refusing to fully enjoy your stay (58).

*A note on the accuracy of society’s self-conscious gesture of admitting its mission to “liberate” the subject from the superego: crucially, once the subject is “liberated” from repression, the Id (drives) are no longer unconscious… as such, they are no longer drives. Thus what society posits as the “liberated drives” are actually pseudo-natural human constructs; they are merely the sublimation of the actual drives, i.e., the unconscious, which can’t ever be put into social circulation but rather takes the form of the unarticulated “symptom” that the analyst (ideological critic) must uncover.